Axel Springer pulls out of race for Rzeczpospolita

No Polish partnership between Mecom and Axel Springer.

After months of speculations the German newspaper giant was vying for both Rzeczpospolita and Mecom Poland, it emerged yesterday that Axel Springer had not submitted a bid for the Polish state's 49 pc stake in Rzeczpospolita - where Mecom is the majority owner.

Czech publisher Respekt Media, who along with Springer was reported to be one of four bidders provided access to undertake due diligence tests, also abstained from submitting a bid, which means only two companies, United Business Entertainment (

and

Point Group, are still competing for the stake. The Polish Treasury is expected to announce its decision next week according to tvn24.pl (and Google Translate). A source at Axel Springer told Reuters the German group now had no interest in Rzeczpospolita.

Predictably, running a media company together with the Polish government has been a rather troublesome affair for Mecom, as it was for the previous owner Orkla Media. Among other things the former Communist state has accused the company, run by David Montgomery who was renowned for his brutal cost-cutting regime while at The Mirror, of not delivering good enough financial results. As Mecom's recent agreements to sell its German and Western Norwegian divisions are not enough in their own right to solve the company's covenant issues, many have wagered that its Polish arm, made up of Media Regionale and the 51pc stake in Rzeczpospolita, will go next.

However, despite Montgomery pledging long term commitment to what's left of its Norwegian arm, Edda Media, when talking to employee representatives in Oslo early this month, industry sources keep telling us Mecom is actively pursuing further sales in Norway. Now, not long ago, when Norwegian media was abuzz with speculations about A-pressen or others acquiring Edda, a newswire reporter asserted all leaks media had received during this... eh... courtship had been from the prospective buyers, and, obviously, all parties have their agendas. In short, for those who emailed me asking about that Oslo meeting: I suggested upfront, based on previous such meetings, it would be interesting and confrontational - I was wrong about confrontational, both sides denied it had been, but it was certainly interesting....

Update 21-03/09, 11:50 CET: do check Krzysztof Urbanowicz' post which contains additional information and analysis, here with Google Translate if your Polish is as bad as mine.